You got to love it when a plan comes together.
Clayton Cramer advises:
It appears that along with reducing taxes on rich people (those making more than $250,000 per year), allowing the Bush tax cuts to expire at the end of the year is going to have a bunch of other interesting effects, including: "The student loan interest deduction will be disallowed for hundreds of thousands of families." I have never paid any attention to this, because it has been decades since I have paid student loan interest, but my daughter tells me -- and what I can find poking around -- tells me that a lot of Obama voters are going to be in for a rude awakening on this subject.
You may be able to deduct up to $2,500 of the interest you paid on student loans on your federal individual income tax return. The deduction is not limited to government-sponsored loans, but does not apply to loans made to students by family members. The Tax Relief Act of 2010 extended the student loan deduction through 2012. After 2012, the deduction will revert to a previous tax law in which interest on a student loan is deductible only for the first 60-months of repayment.This only applies to those who are middle class and below. The TurboTax website explains that you only get to deduct this if:
Your modified adjusted gross income* is less than $75,000($155,000 if filing joint return).Which means a lot of Obama voters -- people that bought into Obama's "soak the rich" rhetoric -- who have been able to deduct the first $2,500 of student loan interest from their federal income taxes -- are going to lose that deduction if they are more than five years into their loans. Even more worrisome is that many who have been taking this deduction for the last several years, and have adjusted their tax withholding because of this, will discover that this is no longer the case when they do their 2013 taxes early in 2014. But since many of these are low-information voters, when Obama blames Bush for this, they will believe him.